The US has sent the world a green wakeup call

The map of global green energy production for the future is being drawn, and the United States has established a significant landmark.

Amid an energy crisis exacerbated by the invasion of Ukraine, President Joe Biden’s Inflation Reduction Act includes a game-changing $369bn for climate and energy funding on top of the $110bn of funding already channeled into climate investments last year. This is expected to unlock more than $1tn in combined climate-related investments.

With the IRA the Americans have put themselves at the forefront of the race to become world leader in green energy production and have given the renewables transition a much-needed boost. The legislation is not perfect in every detail. But as the saying at Nasa goes: “Better is the enemy of good enough.”

Considering the daunting task we have in front of us, this is the mindset we need. We do not have time to wait for everything to be perfect.

Scaling green energy production and making it price competitive is a serious challenge. By providing an attractive business case for private and public partnerships, the IRA can help us fix this problem through large investments in a full suite of low-carbon technologies. An analysis by the Boston Consulting Group shows that with the groundbreaking incentives included in the act, the cost of solar power can be halved, and onshore wind power prices lowered by more than 60 per cent.

At A. P. Moller-Maersk, we operate more than 700 large container vessels and 68 container terminals, as well as 3.2mn square meters of warehousing. Every year we conduct almost 5mn container moves on rail, trucks, and barges. We consume large amounts of energy, and in our ships alone, we burn close to 12mn tonnes of fossil fuel per year.

Nevertheless, we want to be climate neutral by 2040 and to achieve significant emission reductions ahead of 2030. This will require a complete shift from fossil to green fuels.

To make this happen, we need a market for a green fuel such as e-methanol. We need access to lots of cost-efficient renewable energy to produce the hydrogen needed for the e-fuels and to secure a fuel price that is attractive for our customers. And we need a new energy infrastructure — one that currently does not exist. So when we see an “open for business” sign in the US, we pay attention.

Industry leaders must help to forge the path forward. We are looking for strong partnerships and investment opportunities to create the market at the requisite global scale, and potentially to become directly involved in renewable energy production such as wind and solar to produce our green fuels.

I am convinced that green hydrogen-based fuels will scale in the future and that prices will eventually drop when that happens. The Americans have laid the groundwork for this by showing a willingness to invest in developing an attractive home turf for this market, ahead of the rest of the world.

For years, Europe liked to think of itself as the global frontrunner in the struggle against climate change. But the US is now in the driving seat.

I hope that this American move can serve as a green catalyst for the rest of the world. Imagine a green “space race” in which regions and nations push each other to create the best conditions for an accelerated energy transition.

Of course, in a race someone will finish first — but in the end we will all be winners from a global political environment that fosters faster decisions, incentivises green investments and enables businesses to embark on meaningful transition journeys. The upshot will be greater innovation, production at scale and the construction of the green energy infrastructure that is so badly lacking today.

Acting on climate change and making the move away from fossil fuel energy is a global challenge — but one that also comes with global opportunities. The US government has sent a clear signal with its commitment to partnerships with businesses who are ready to invest in a green future. Europe, China, the Middle East, India and others should follow suit with their own ambitious investment plans.

Despite the turmoil in the world right now, we should not forget that we are in a climate emergency, and we must act now to make significant progress before 2030. The US has invited the rest of the world to join the race to a green future, but the good news is that there is space for more than one frontrunner. If we want to go far, we need to go together.